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Agriculture and Livestock Development Cabinet Secretary Mutahi Kagwe has announced a Ksh 4 billion annual investment plan targeting turnaround the sugar sector.
The investment will be funded through the Sugar Development Levy (SDL) to support sustainable growth across the entire sugar industry.
Speaking during a tour of West Kenya Sugar Company which secured a 30-year lease for Nzoia Sugar, Kagwe said 40pc of the SDL will go towards cane development programs across the country while the remaining allocation will support key strategic areas.
“These investments are designed to secure the long-term sustainability of the sugar industry,” said Kagwe.
He said the allocations follow extensive consultations and concerns raised by farmers’ unions and miller representatives.
The government will spend 15pc or Ksh 600 million out of the fund to rehabilitate roads in sugarcane-growing regions and another 15pc on research and innovation for improved industry productivity.
Factory rehabilitation across the sector will get 15pc of the allocation, 5pc to strengthening farmer associations with the remainder funding administrative operations under the Sugar Board.
West Kenya Sugar Company, owned by the Rai Group, is now the operator of Nzoia Sugar under the lease agreement, a move the government hopes will help revive the state-owned mill and bring stability to the sector.
He urged Kenyans to support investors who have committed significant capital to the sector, pointing to companies like West Kenya that are helping turn around struggling institutions.
“We must shift from being net importers to exporters of sugar by 2026,” he said.
Kagwe commended West Kenya Sugar for its strong farmer-centred policies, including weekly payments to over 120,000 contracted farmers and consistent monthly wages for staff.
The company disburses over Ksh 14 billion annually in farmer payments and invests an additional Ksh 7 billion annually in cane development initiatives.
According to the Agriculture and Food Authority (AFA), as of September 30, 2024, nearly 50pc of all land under sugarcane cultivation in Kenya is managed by the Rai Sugar Group, underlining the group’s growing role in the industry’s development.
To address the growing concern of cane poaching, CS Kagwe called on farmers to remain loyal to mills that support them through development programs.
He also directed the Sugar Board to convene a meeting to establish and enforce clear zonal boundaries among millers to reduce conflict.
He further advised farmers to allow cane to fully mature before harvesting to improve sugar quality and boost Kenya’s competitiveness in the global market once exports commence.
CS Kagwe also toured Butali Sugar Mills, another key private miller in Kakamega County, as part of his broader assessment of private sector participation in sugar sector reforms.
